JM Smucker Company (SJM)
Working capital turnover
| Apr 30, 2024 | Apr 30, 2023 | Apr 30, 2022 | Apr 30, 2021 | Apr 30, 2020 | ||
|---|---|---|---|---|---|---|
| Revenue | US$ in thousands | 8,176,400 | 8,522,300 | 8,066,900 | 8,091,800 | 7,763,000 |
| Total current assets | US$ in thousands | 1,966,900 | 2,858,700 | 2,010,100 | 1,941,700 | 1,972,700 |
| Total current liabilities | US$ in thousands | 3,761,100 | 1,986,700 | 1,952,800 | 2,867,500 | 1,587,100 |
| Working capital turnover | — | 9.77 | 140.78 | — | 20.13 |
April 30, 2024 calculation
Working capital turnover = Revenue ÷ (Total current assets – Total current liabilities)
= $8,176,400K ÷ ($1,966,900K – $3,761,100K)
= —
Working capital turnover is a financial ratio that measures how efficiently a company is able to generate revenue from its working capital. A higher working capital turnover ratio indicates that the company is able to efficiently utilize its current assets to support its revenue generation.
Looking at the data provided for JM Smucker Company, we can observe significant fluctuations in the working capital turnover ratio over the years. In 2023, the ratio was 9.77, indicating that for every $1 of working capital, the company generated $9.77 of revenue. This suggests a moderate level of efficiency in utilizing its working capital.
The ratio spiked significantly to 140.78 in 2022, showcasing an outstanding efficiency in generating revenue from its working capital. This could be due to various factors such as improved inventory management, faster collection of receivables, or better cash flow management.
In contrast, the absence of data for 2021 and 2020 makes it challenging to analyze the trend effectively. However, based on the available data, JM Smucker Company demonstrated varying levels of efficiency in utilizing its working capital to generate sales over the specified period.
In conclusion, the company's working capital turnover ratio has shown fluctuations, highlighting the importance of continuously monitoring and managing working capital efficiency to support revenue generation.